Recognizing and addressing capacity struggles early on-whether they are related to internal operations and systems or governance and leadership development-keep these problems from escalating into more serious breakdowns. Philanthropic advisors can help clients to identify opportunities for making strategic capacity-building investments that will strengthen organizations for the long term.
Board Leadership
Many of your affluent clients likely sit on nonprofit boards. Encourage them to take their fiduciary duties seriously and to be as engaged as possible with the organizations on whose boards they serve. Doing so will help ensure they are not blind-sided by or worse, implicated, in an organization's failure. Media reports of the fallout from the YWCA and Hull House closures show board members struggling to defend their reputations after they were accused of being "asleep at the wheel".
According to the State of the Sector survey, nearly 40% of charity leaders believe their boards don't understand the basics of their charities' expenses and are not involved with the organization's direction, fund-raising or financial planning. This is particularly concerning given that research has shown board engagement to be one of the strongest predictors of organizational success. Therefore, the importance of board involvement during challenging economic times cannot be overstated.
These are tough times for nonprofits and the donors who want to help. By helping clients recognize signs of trouble and identify opportunities for making strategic contributions, advisors offer clients a positive return on their philanthropic investments. As a result, they will enjoy the business benefits of offering unique and exemplary services that have clients' best financial and charitable interests in mind.
Mollie Bunis is an advisor and Meg Lassar is an analyst with Strategic Philanthropy Ltd., a Chicago-based global philanthropic advisory practice serving clients worldwide.